Last Updated: May 2026
TL;DR: Always get three written quotes. Each quote should itemize material, labor, permits, and overhead separately. Throw out the lowest and highest. The middle quote is usually closest to fair market value. Anyone who refuses to itemize is hiding something.
One quote tells you nothing about whether it is fair. Two quotes leave you guessing. Three quotes establish a price range. More than three becomes a time sink with diminishing returns and tends to attract less serious contractors. The three-quote rule has been industry standard for decades because it reliably reveals outliers in both directions.
The low quote is often a contractor cutting corners somewhere - using cheaper materials, skipping permit fees, underestimating labor hours. The high quote often includes premium markups, generous contingency, or simply a contractor who does not need the work. The middle quote is usually the most realistic.
A professional renovation quote breaks down the full cost into:
According to Harvard's Joint Center for Housing Studies, the labor-to-material ratio for residential renovations typically runs 60/40 or 50/50 in 2026. If a quote shows 80 percent labor and 20 percent material, the contractor is either over-charging on labor or using very inexpensive materials. If a quote shows 80 percent material and 20 percent labor, they are likely under-estimating the time the work will actually take.
No itemization at all - just a single lump sum. Demands for more than 25 percent deposit upfront (state laws often cap this at 10 percent or less). No written contract. No proof of license and insurance offered. Pressure to decide today or lose the price. Promises that seem too good to be true on price or timeline. Significantly lower than two other quotes - usually means corners will be cut.
Major renovations almost always require permits. Skipping permits to save $200 to $2,000 is one of the worst trade-offs a homeowner can make - unpermitted work can stop a future home sale dead, void insurance coverage if there is a problem, and force expensive retroactive permitting. Any contractor suggesting you skip permits is telling you something about how they do business. Run.
Use the Vanderflip renovation cost calculator to establish a baseline budget before you call any contractors. Knowing the ballpark range in advance lets you recognize quotes that are way out of line. Per Angi's True Cost Guide, homeowners who research costs in advance pay 10 to 20 percent less on average for the same scope of work.
This article is for informational purposes only and does not constitute professional contracting, financial, or legal advice. Cost data is sourced from publicly available industry reports and updated as market conditions change. Always obtain multiple quotes from licensed contractors before making a decision.